Meta Freezes AI Hiring Amid Rising Costs and Investor Concerns

Palo Alto, California — Meta Platforms has implemented a hiring freeze in its artificial intelligence division following surging costs that have raised concerns among investors. The freeze began last week, coinciding with a broader restructuring of the group.

According to sources familiar with the situation, the freeze prohibits current employees from moving across teams within the AI division. Any exceptions for external hires must be approved by chief AI officer Alexandr Wang.

Meta has aggressively hired more than 50 AI engineers and researchers for its newly organized division, characterized by efforts in developing a superintelligence project. The tech giant is known for offering lucrative nine-figure compensation packages to attract top talent.

A Meta spokesperson described the hiring freeze as part of “basic organizational planning.” This includes creating a robust structure for their ongoing superintelligence initiatives and preparing for annual budgeting. The company’s shares, which rose 28% this year, were down 1% in early trading.

Concerns over Meta’s stock-based compensation costs have emerged as analysts warn that these expenses could jeopardize shareholder returns. Morgan Stanley’s research recently noted the fast-rising costs of AI talent might impede capital returns through stock buybacks.

The recent restructuring divides Meta’s AI efforts into four teams: one focused on superintelligence, another on AI product development, a third on infrastructure, and a fourth dedicated to long-term explorative projects. Yet, the fundamental research group remains largely unaffected by the reorganization.

Meta previously faced criticism regarding the performance of its large language models, which resulted in the dissolution of the AGI Foundations team. As part of its restructuring, the company has been integral in recruiting distinguished researchers from firms like OpenAI and Google.

CEO Mark Zuckerberg has taken a hands-on approach to recruitment, offering researchers substantial packages and personal outreach to attract top talent. His efforts included reaching out to key figures from leading AI labs, providing them with offers that could reach extraordinary total compensation figures.

The freeze comes against a backdrop of investor skepticism concerning the return on investments made in AI talent by major tech firms, including Meta. The coming months will be critical as the company navigates these challenges.